Monday, February 25, 2013

Breakthrough Regarding Legal Liability of Canadian Mining Corporations for Abuses Overseas

A news release today: Mayans' lawsuit against HudBay over shootings and rapes at mine in Guatemala to proceed in Canadian courts

TORONTO, ONTARIO--(Marketwire - Feb. 25, 2013) - In an important precedent-setting development for the accountability of Canadian mining companies for alleged overseas human rights abuses, victims of rape and murder at a Guatemalan mine are now able to sue a Canadian mining company in Canadian courts.

Guatemalan Mayan villagers who are suing Canadian mining company HudBay Minerals for the alleged gang-rapes of eleven women, the killing of community leader Adolfo Ich and the shooting and paralyzing of German Chub at HudBay's former mining project in Guatemala recently learned that HudBay has abruptly abandoned its legal argument that the lawsuit should not be heard in Canada, just before an Ontario court was set to determine the issue. As a result, and for the first time, a lawsuit against a Canadian mining company over alleged human rights abuses abroad will be heard in Canadian courts.

"This is a stunning victory for human rights, and paves the way for future lawsuits against Canadian mining companies" said Murray Klippenstein, lawyer for the Mayan plaintiffs. "Corporations be warned - this case clearly shows that Canadian companies can be sued in Canadian courts for alleged human rights atrocities committed at their foreign operations."

HudBay had filed extensive legal briefs arguing that the lawsuit should be heard in Guatemala, not Canada, despite overwhelming evidence indicating that Guatemala's justice system is dysfunctional, making it impossible for the victims to get justice there. According to the United Nations, Guatemala is one of "the world's most violent countries officially at peace". According to Human Rights Watch, 99.75% of violent crime in Guatemala goes unpunished due to corruption, and intimidation and attacks against judges and witnesses.

"HudBay fought Angelica, Rosa, and their co-plaintiffs tooth and nail on this issue for over a year, forcing survivors of rape to travel to Toronto to endure extensive cross-examination and forcing us to spend countless hours compiling stacks of evidence, expert reports, and witness testimony." said Murray Klippenstein. "Now the defendant's legal resistance on this key point has collapsed. Rosa, Margarita and their co-plaintiffs should be praised for the courage and determination they have shown through this difficult process."

While this development effectively removes the legal argument that the case cannot be heard in Canada, other hurdles facing the Mayan villagers in their quest for justice remain. HudBay continues to rely on antiquated corporate law concepts to argue in the Canadian court that its corporate head-office is not legally responsible for the harms caused by its wholly-owned and controlled subsidiary corporation. The lawsuits continue in Ontario courts.

For more information, see
Klippensteins Barristers & Solicitors
Murray Klippenstein
(416) 598-0288 or (416) 937-8634
Klippensteins Barristers & Solicitors
Cory Wanless
(647) 886-1914

Thursday, February 21, 2013

Proxy voting survey reveals growing support for shareholder proposals

A growing number of shareholders are paying more attention to how they vote on key issues, according to SHARE's annual proxy voting survey. Several votes in 2012 registered 20% or more of shareholders voting against management recommendations.

Firms that participated in the survey were more likely to vote against the recommendations of management, the survey revealed. Participants were also more likely than other shareholders to vote for shareholders’ proposals, and more likely to support proposals that asked companies to be more socially and environmentally responsible.

“For instance, 61% of the participating firms voted for a proposal filed with Alimentation Couche-Tard asking that company to prepare a sustainable development report with a view to eventually comply with the Global Reporting Initiative guidelines,” the survey found. “And 48% of participating firms voted for a proposal asking Enbridge to report on the risks of failing to get First Nations’ support for its Northern Gateway project.”

Nearly 30% of shareholders voted in favour of the Enbridge proposal, illustrating that shareholders increasingly recognize the investment risks associated with social and environmental issues when they vote, said Peter Chapman, SHARE’s Executive Director. “However many institutional investors, including charitable foundations and trusts, are not yet providing guidance to managers and proxy voting service firms to ensure that voting is aligned with their interests.”

SHARE also highlighted vote results at SNC Lavalin, where nearly one-quarter of votes were lodged against the executive compensation package offered to former CEO Pierre Duhaime.

“In the realm of proxy voting, a vote of 25% against a severance package is a strong show of shareholder opposition,” notes Laura O’Neill, SHARE’s Director of Law and Policy, “But one still wonders how more than 75% of shareholders voted in favour of the former CEO being rewarded so generously despite the significant loss in shareholder value on his watch.”

The 2012 annual Key Proxy Vote Survey analyzed the voting records of 32 firms with combined Canadian equity holdings in excess of $58 billion in 2012. 

Full results are available at the survey website.

Friday, February 1, 2013

Is unconventional oil red meat or tobacco?

I love this post by Chrystia Freeland, a Reuters columnist in this morning's Thomson Reuters news email.
It is an excellent  contribution to the debate about whether Canadian SRI portfolios should divest from the tar sands, and makes it easier to determine which side you are on.... 

COLUMN-The key to the meaning of Keystone XL

Is oil like red meat or is it like tobacco? Your answer to that question determines how you feel about the North American boom in unconventional sources of fossil fuel, particularly the Canadian oil sands.

If you think oil is like tobacco, it is a strictly noxious commodity, which seriously harms its users and those around them. We should stop consuming it at once and at all costs. But if you think oil is like red meat, you take a more nuanced view. For the health of the planet, we should find greener alternatives to it whenever we can, but used wisely and in moderation it has an honorable role in the 21st-century economy.

This morality play is being acted out with the greatest intensity in the fight over the proposed Keystone XL pipeline, which would stretch from Canada to the Texas Gulf Coast.

"Keystone is really a symbol of oil, it is very emotive,” Daniel Yergin, the Pulitzer Prize-winning energy expert and chairman of IHS Cambridge Energy Research Associates, told me. "It is probably the most famous pipeline in the history of the world, and it hasn’t even been built yet. It is a symbol around which the opponents of hydrocarbon have rallied."

Last autumn, the consensus view was that the pipeline would be approved after the U.S. presidential election, no matter who won. In recent weeks, those odds have shifted.

"If you had asked me prior to the U.S. election, I would’ve said, 'Of course it’s going to be built after the election, regardless of who wins,'" said Naheed Nenshi, the mayor of Calgary, Alberta, where many of the oil companies that are counting on Keystone have their headquarters.

"If you had asked me immediately after the U.S. election, I would’ve said, 'Of course it’s going to be built, now that the immediate political pressure is off,'" he said. But today, Nenshi is less certain: "The feeling in Canada over the past four or five weeks has become less optimistic about this thing being built.”

Jim Flaherty, the Canadian finance minister, took the same view. "I actually don’t know,” he replied, when I asked him if the Keystone pipeline would be built. "I had reason for optimism before the election that the president would approve it, were he re-elected.”

But, Flaherty said, President Barack Obama’s inaugural address "was not encouraging."

Many politicians and business leaders in Canada, whose economy relies heavily on fossil fuels, have been caught by surprise by the intense opposition to the Keystone pipeline and to the oil sands crude it would carry south. The paperback edition of Yergin’s latest book, "The Quest," provides a powerful explanation of that mystery.

"We have to start somewhere to end the addiction to oil,” is the way one environmentalist explained the broader strategy to Yergin. "The pipeline is a convenient device for fighting a larger battle," Yergin said.

Canadians, who are accustomed to being thought of as the world’s official nice guys - think of all those students globe-trotting with maple leaves on their backpacks - are uncomfortable with this new role as climate change villains. (Disclosure: I am a proud Canadian myself.)

"I think it’s a shame that a one-meter-in-diameter pipe is suddenly having to wear all of the sins of the carbon economy,” Calgary's Nenshi said. "You know, it’s not clubbing seals with child labor.”

Yergin agrees. "The one thing that doesn’t get much talked about is that this oil sands technology continues to advance; it is not static,” he said.

"We reached peak oil demand in the U.S. more than half a decade ago. Our oil demand is going down. Our cars are getting more efficient,” he said. "Meanwhile, there is a supply of energy we do need now. The real trade-off is, is it going to be Canadian oil or is it going to be Venezuelan oil?”

That trade-off used to be viewed in primarily strategic terms: Were our oil suppliers political friends or foes? By that measure, the Canadians score high. But the World Economic Forum at Davos, Switzerland, of all places, underscored another consequence of the North American boom in unconventional sources of oil: its impact on jobs.

Participants from slow-growth Europe and more vigorous Asia alike were dazzled by the job-creating potential of North America’s renaissance as a fossil fuel producer. Moreover, these jobs happen to be the very sort that are being hollowed out by globalization and the technology revolution: high-paying, skilled, blue-collar work that cannot be outsourced or done by robots.

Which may be why the Canadians are picking up such mixed messages from the White House on the Keystone pipeline. For the Al Gore wing of the Democratic Party, it has become a symbolic battle in the fight to save the planet; for the Joe Biden wing, Keystone and the unconventional oil revolution are a source of the middle-class jobs many feared modern economies could no longer provide.

The pipeline is also a litmus test for what you think is the most important problem in the early 21st century.

--- Chrystia Freeland, Reuters columnist

--- Any opinions expressed are her own